<PAGE>

                                CONSULTING AGREEMENT

     THIS CONSULTING AGREEMENT, herein referred to as "Agreement" made and 
entered into as of the 20th day of January, 1999, by and between Arcadia 
Financial Ltd., a Minnesota corporation (the "Company") and Warren Kantor 
("Consultant").

     WHEREAS, the Company engages in the sales finance business, and

     WHEREAS, the Consultant has numerous years of experience in the 
financial services accounting and finance profession, and

     WHEREAS, the Company desires to engage Consultant to perform certain 
consulting services for the Company, and

     WHEREAS, Consultant is seeking such engagement, and

     WHEREAS, the parties desire to set forth the terms and conditions of 
consulting services to be provided by Consultant to the Company.

     NOW, THEREFORE, in consideration of the promises and the mutual benefits 
which will accrue to the parties to this Agreement, it is mutually understood 
and agreed as follows:

     1.   DESCRIPTION OF SERVICES.  Consultant shall furnish and perform the 
consulting services pertinent to the operations of the Company which are 
specifically set forth in Exhibit A attached hereto and made a part hereof 
(the "Consulting Services").  The Consulting Services shall be provided as 
needed by the Company.  Such services shall be performed to be best of the 
Consultant's ability and in a competent, efficient and satisfactory manner.  
The Company acknowledges that Consultant is engaged in various other 
substantial business activities, that the Company's request for Consulting 
Services hereunder from Consultant shall not unreasonably interfere with 
Consultant's other business activities and that Consultant shall be entitled 
to engage in other business for other persons or entities during the term 
hereof subject to the provisions of paragraph 6 hereof.

     2.   PAYMENT FOR SERVICES.  In consideration of the Consulting Services 
to be provided by Consultant to the Company and of other obligations of 
Consultant contained herein, the Company shall, concurrent with the execution 
hereof, execute and deliver to Consultant a non-statutory stock option in the 
form and substance of Exhibit B attached hereto (the "Option Agreement").  
Pursuant to the Option Agreement, the Company shall grant to Consultant the 
option to purchase up to 125,000 shares of the $.01 par value common stock of 
the Company ("Common Stock") at an option price equal to $4.00 per share (the 
fair market value of the Common Stock on the date of this Agreement), subject 
to the terms and conditions of the Option Agreement.  Such grant shall also 
be subject to 

<PAGE>

the approval of the shareholders of the Company at its next annual meeting.

     3.   REIMBURSEMENT OF EXPENSES.  Consultant shall be reimbursed for any 
and all travel or other expenses borne or expended by Consultant in 
connection with the Consulting Services.  Any reasonable expenses incurred by 
Consultant in performing his duties hereunder shall be reimbursed by the 
Company when he furnishes appropriate documentation.

     4.   TERM OF ENGAGEMENT.  Subject to the terms and conditions hereof, 
the term of Consultant's engagement hereunder (the "Consulting Term") shall 
commence as of January 1, 1999, and shall continue until December 31, 1999, 
unless earlier terminated pursuant to paragraph 5.1.

     5.   TERMINATION.

     5.1  TERMINATION.  Consultant's engagement hereunder shall terminate 
upon the happening of any of the following events:

     a.   by the mutual written agreement of the Company and Consultant;

     b.   upon the death of Consultant;

     c.   upon 14 days' prior written notice from the Company to Consultant with
          Cause (as defined below); or

     d.   upon 14 days' prior written notice from Consultant to the Company, if
          the Company shall make a material breach of the terms of this
          Agreement.

     As used in this Agreement, the term "Cause" shall mean (i) any fraud, 
misappropriation or embezzlement by Consultant in connection with the 
business of the Company; (ii) any failure by Consultant to perform the 
Consulting Services assigned hereunder, provided that Consultant shall first 
have received a written notice from the Company which sets forth in 
reasonable detail the manner in which Consultant has failed to perform his 
duties, in which case Consultant shall have a period of thirty (30) days to 
cure the same, unless the same cannot be reasonably cured within said thirty 
(30) day period, in which event Consultant shall have up to an additional 
ninety (90) days to cure the same; (iii) any material breach by Consultant of 
this Agreement, provided that Consultant shall first have received written 
notice from the Company which sets forth in reasonable detail the breach by 
Consultant and Consultant shall have a period of thirty (30) days after 
receipt of such notice to cure such breach, unless the same cannot be 
reasonably cured within said thirty (30) day period, in which event 
Consultant shall have up to an additional ninety (90) days to cure the same; 
(iv) willful destruction of the property or records of the Company; (v) 
dishonesty or deliberate falsification of the Company records; or (vi) 
harassment (including sexual harassment) of a Company employee.  The sole 
remedy of the Company in the event of a breach of this Agreement 


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shall be to terminate this Agreement.

     6.   PROPRIETARY INFORMATION.

     6.1  PROPRIETARY INFORMATION.  Except by the prior written permission 
from the Company, Consultant shall never disclose or use any proprietary 
information ("Proprietary Information") of the Company of which Consultant 
becomes or has become informed during his past or future engagement with the 
Company or any of its subsidiaries, whether or not developed by Consultant, 
except as required by his duties to the Company or any of its subsidiaries.  
Proprietary Information shall mean information concerning the Company, its 
business or its customers that derives independent economic value, actual or 
potential, from not being generally known to, and not being readily 
ascertainable by proper means by, other persons who can derive economic value 
from its disclosure or use. Proprietary Information includes, but is not 
limited to, the following types of information and other information of a 
similar nature (whether or not reduced to writing), all of which Consultant 
agrees constitutes the valuable trade secrets of the Company; research, 
development, know-how, plans and processes, marketing plans and techniques, 
existing and contemplated products and services, customer and prospect names 
and related information, prices, sales, credit scoring, personnel, computer 
programs and related documentation, technical and strategic plans, and 
finances.  Proprietary Information also includes any information of the 
foregoing nature that the Company treats as proprietary or designates as 
Proprietary Information, whether or not owned or developed by the Company. 
Information does not lose its Proprietary Information status merely because 
it was known by a limited number of other persons or entities or because it 
did not entirely originate with the Company.  Such nondisclosure and non-use 
shall mean, without limiting the generality of the foregoing, during the 
Consulting Term and at all times thereafter, the Consultant agrees to 
receive, maintain, and use Proprietary Information in the strictest 
confidence and, except with the consent of the Company will not directly or 
indirectly reveal, report, publish, disclose, or transfer any Proprietary 
Information to any person, firm, corporation, or other entity or utilize any 
Proprietary Information for the Consultant's own benefit or intended benefit 
or for the benefit or intended benefit of any other person, firm, corporation 
or other entity.

     6.2  DELIVERY OF PROPRIETARY INFORMATION.  Upon the request of the 
Company or the termination of his engagement, Consultant agrees to deliver to 
the Company all materials that include Proprietary Information, including 
without limitation customer lists, instruction sheets, manuals, computer 
programs (including source codes), letters, financial records, notes, 
notebooks, reports and copies thereof, and all other materials which are 
under his control and which relate to the business of the Company or its 
subsidiaries.  Consultant agrees and understands that the Proprietary 
Information and all information contained therein shall be at all times the 
property of the Company.  Further, upon termination of his engagement, 
Consultant agrees to make available to any person designated by the Company 
all information concerning pending or preceding transactions or programs 
which may affect the operation of the Company or any of its subsidiaries 
about which Consultant has knowledge.  The obligations of Consultant 
contained in this 


<PAGE>

paragraph are in addition to the obligation of Consultant to return to the 
Company, upon the request of the Company or the termination of his 
engagement, all property of the Company then in his possession.

     6.3  SEVERABILITY.  The covenants of Consultant set forth in this 
paragraph 6 are separate and independent covenants for which valuable 
consideration has been or will be paid or given, receipt of which is 
acknowledged by Consultant, and have also been made by Consultant to induce 
the Company to enter into this Agreement.  Each of the aforesaid covenants 
may be availed of or relied upon by the Company in any court of competent 
jurisdiction.

     6.4  SPECIFIC ENFORCEMENT.  Consultant understands and agrees that a 
breach by him of any provisions of this Agreement will cause the Company 
irreparable injury and damage which cannot by compensable by receipt of money 
damages. Consultant, therefore, expressly agrees that the Company shall be 
entitled, in addition to any other remedies legally available, to injunctive 
and/or other equitable relief to prevent a breach of this Agreement or any 
part thereof.

     7.   OWNERSHIP OF PROPRIETARY INFORMATION.  All Proprietary Information 
prepared, created or assembled by Consultant or caused by Consultant to be 
prepared, created or assembled in connection with this Agreement, as well as 
any copyright, patent and trademark rights related thereto, shall be work 
made for hire and shall at all times remain the sole and exclusive property 
of the Company.

     8.   RELATIONSHIP OF PARTIES.  Consultant is engaged by the Company only 
for the purpose and to the extent set forth in this Agreement, and 
Consultant's relationship to the Company shall, during the period covered by 
this Agreement, be that of an independent contractor.  Consultant shall not 
be considered an employee of the Company and shall not be entitled to 
participate in any plans, arrangements or distributions by the Company 
pertaining to or in connection with any insurance, pension, stock, bonus, 
profit sharing or similar employee benefits given employees of the Company.  
Consultant shall be under the control of the Company as to the result of 
Consultant's work only and not as to the means by which such result is 
accomplished.  Consultant shall not represent that Consultant has any power 
to bind the Company or to assume or to create any obligation or 
responsibility, express or implied, on behalf of the Company or in its name.  
The Company shall not be liable for any losses, injuries, damages, or claims 
of any nature whatsoever arising out of Consultant's activities or 
representations under or in connection with this Agreement.

     9.   TAXES.  Consultant acknowledges and agrees that it shall be the 
obligation of Consultant to report as income, all compensation received by 
Consultant hereunder and agrees to reimburse, indemnify and to hold and save 
the Company harmless to the extent of any obligations imposed by law on the 
Company to pay withholding taxes, social security, unemployment or disability 
liability insurance or similar items in connection with any compensation paid 
to Consultant.



<PAGE>

     10.  MISCELLANEOUS.

     10.1 VALIDITY.  Whenever possible, each provision of this Agreement 
shall be interpreted so that it is valid under applicable law.  In case any 
one or more of the provisions of this Agreement is to any extent found to be 
invalid, illegal or unenforceable in any respect under applicable law, that 
provision shall still be effective to the extent it remains valid and the 
validity, legality and enforceability of the remaining provisions contained 
herein shall not in any way be affected or impaired thereby.  If, moreover, 
any one or more of the restrictions contained in this Agreement is for any 
reason held excessively broad, it shall be construed or rewritten 
(blue-lined) so as to be enforceable to the extent of the greatest protection 
to the Company compatible with applicable law.

     10.2 APPLICABLE LAW.  This Agreement is entered into in the State of 
Minnesota and shall be construed, interpreted and enforced according to the 
statutes, rules of law and court decisions of said state.

     10.3 ENTIRE AGREEMENT; AMENDMENTS.  This Agreement and the Option 
Agreement constitute the entire agreement of the Company and Consultant with 
respect to Consultant's engagement by the Company and supersedes any other 
understandings or agreements, whether written or oral.  This Agreement may be 
amended or superseded only by an agreement in writing by the Company and 
Consultant.

     10.4 NOTICES.  All notices, requests, demands and other communications 
provided for by this Agreement shall be in writing and shall be sufficiently 
given if and when mailed by registered or certified mail, return receipt 
requested, to the Company and its executive offices and to Consultant at his 
address set forth below or in either case such other address specified by a 
party hereto in a written notice hereunder, or when personally delivered.

     10.5 BINDING EFFECT.  This Agreement shall be binding upon and inure to 
the benefit of the Company and its successors and assigns.  This Agreement 
shall also be binding upon the inure to the benefit of Consultant and his 
heirs and representatives.  This Agreement may not be assigned by either 
party without the prior written consent of the other party.

     10.6 RESERVATION OF RIGHTS.  Nothing contained herein shall limit any 
other rights the Company has at law in connection with Consultant's 
obligations to the Company, all of which are preserved.

     10.7 SURVIVAL.  Notwithstanding any termination of Consultant's 
engagement hereunder or any termination of this Agreement, the provisions of 
paragraph 6 hereof shall survive termination of this Agreement and 
termination of Consultant's engagement hereunder.


<PAGE>

     IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the day and year first above written.

                                             Arcadia Financial Ltd.


                                             By:       
Warren Kantor                                     Richard A. Greenawalt
720 Springmill Road                               Its Chief Executive Officer
Villanova, PA  19185                              7825 Washington Avenue South
                                                  Minneapolis, MN 55439-2435


<PAGE>

                                CONSULTING AGREEMENT
                                          
                                     EXHIBIT A


CONSULTANT'S SERVICES.  Consultant shall endeavor to promote the interests of
the Company and shall provide to the Company advice as to its manner of doing
business in such of the following areas as are requested by the Company:

               long range planning,
               tax strategies development, treasury function review,
               internal audit function review,
               asset liability strategy development,
               asset backed securitization development,
               asset backed securitization planning,
               corporate development (merger, acquisition)
               investor relations,
               due diligence (re: acquisitions),
               financing strategies,
               SEC relations,
               capital raising strategies,
               reserving architecture,
               asset quality review, and
               note program strategy.
               
Consultant shall provide advice and services as to such other related areas 
of the business of the Company as may be reasonably requested from time to 
time by the Chief Executive Officer of the Company.  The Company desires to 
retain the services of Consultant, even though Consultant may become disabled 
or incapacitated.  Accordingly, notwithstanding anything to the contrary 
contained herein, it is expressly understood that the inability of Consultant 
from time to time to render services to the Company by reason of absences, or 
temporary, or permanent illness, disability, or incapacity, or for any other 
reasonable cause beyond the control of Consultant, shall not constitute a 
failure by him to perform his obligations hereunder and shall not be deemed a 
breach or default by him hereunder.